Not upheld: unfair premium pricing and alleged price walking complaint against UK Insurance Limited trading as Direct Line

Decision detail

Summary

Mrs R complained to the Financial Ombudsman Service about unfair premium increases on her car insurance policy with UKI since 2022, noting that alternative insurers offered premiums up to 50% cheaper and alleging UKI engaged in 'price walking'. The ombudsman found that UKI provided clear and detailed information demonstrating fair treatment and that the premiums applied did not exceed new business rates. The ombudsman concluded that different insurers' varying risk strategies and rating approaches do not constitute unfair treatment, and that UKI acted in line with industry rules. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that insurers are entitled to apply their own risk ratings and pricing strategies, which explains price variations across the market. While the ombudsman could not share commercially sensitive pricing details with Mrs R, UKI provided clear information demonstrating fair treatment. The ombudsman confirmed UKI's premiums did not exceed new business rates and that different insurers rating risks differently does not constitute an error but reflects their risk strategy. UKI acted in line with industry rules when calculating premiums.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website